Beth Richardson

Real Estate Made Real Simple

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How do I decide to remodel and stay put or sell and move?

How do I decide to remodel and stay put or sell and move?

 

Yesterday I had meetings with two of you to answer this question so am assuming it is a relevant topic!

First, ask yourself how much you like your lot and your neighbors. Next, ask yourself if you remodeled your home would you be happy there for at least a decade or more? If you absolutely love both your lot and your neighbors and the changes and upgrades you would make would make your home perfect for you for 10+ years, then you are a candidate to stay and upgrade.

Second, find out what it would cost to make the changes you want to make. If you have the resources to pay for the work and you really, really want to stay put, do it!

Third, consider your aversion to risk. If it costs you $100,000 to put an addition on your house, but the addition only adds 50k in value and you already owe 90% of what your house is worth, then you are in a pickle if you borrowed more than the house is worth to do the work, but here is the point, only if you need to sell. In other words, if you owe more than it is worth, but your job is secure and you will never get transferred, then it is just a debt that you are paying off. Your aversion to risk comes in if for some unexpected reason you need to sell after all and you owe more than it is worth and you don’t have the money to make up the difference.

Fourth, if you do have aversion to risk and don’t want to find yourself in the situation in the paragraph above, then call me. I will walk thru and tell you whether what you are planning to do will make a difference in the current value of the home.

As a general rule of thumb, $10,000 spent on general fixes and kitchen and bath upgrades will make sense. Significant additions just cost so much that it can quickly make you upside down.

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